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Council adds Glastonbury B&Q branch to property portfolio

South Somerset District Council has added the Glastonbury branch of B&Q to its growing portfolio of commercial investments.

The district council has bought the site for £4.4 million, reflecting a net initial yield of 7.19%.

It includes a 27,000 square foot retail warehouse, with 8,000 square foot external garden centre and 4,000 square foot secure delivery yard.

It has been tenanted by B&Q since its construction with an unexpired lease term of seven years.

Acquisition advice was provided by retail warehouse specialist Ellie Kirkby at Avision Young and the legal work undertaken by Paul Longman, partner at regional law firm Trethowans.

It comes just weeks after the local authority bought the UK distribution hub of toy giant Hasbro in Newport for £2.78m.

The council’s property portfolio also includes a business park in Christchurch, which was bought for £7.05m and the Bell House office block in Milton Keynes, which cost £2.92m.

Like many other local authorities, South Somerset has turned to commercial property to make up a shortfall in the money it receives from Westminster.

It has created a commercial services and income generation team, which has been set a target of generating £2m in annual income.

‘While it is out of district, this store is one that we know well and one that we consider to be shielded from the general malaise that has hit retail warehousing,’ said the council’s portfolio holder for economic development including commercial strategy, John Clark.

‘This investment is the latest success in achieving the aims of our commercial strategy, which is focused on generating income to secure the provision of public services.  We are pleased to report we are on target to meet our commercial targets.’

Ellie Kirkby added: ‘This should prove to be a solid investment for South Somerset Council. The unit is let at a reasonably low rent, and the lack of other major DIY provision in the town, coupled with a distinct lack of retail warehouse supply, makes this an attractive and relatively rare investment opportunity.

‘In addition, there are asset management opportunities for the council to add value here.’

Photo Credit – Stevepb (Pixabay)

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